Explanation of Registering a Charge for Deposits in a Townhouse Scheme
As a registered Developer embarking on a townhouse scheme comprising 12 or more units, it's essential to understand the process of registering a charge when utilizing deposits received from buyers. This ensures compliance with regulatory requirements and safeguards the interests of purchasers and stakeholders involved in the project. Let's break down the steps involved:
1. Purpose of Registering a Charge:
- If you intend to use deposits received under contracts as part of the financing for your scheme, you must register a charge in favor of the Real Estate Board on the Registered Title to the lands subject to the scheme.
- This charge acts as a form of security, similar to a mortgage, and is registered at the Registrar of Titles office. It covers all monies received under contract agreements with purchasers.
2. Process of Registering the Charge:
- You'll need to visit the Registrar of Titles office to register the charge. This process involves formal documentation and assigns a unique number to the charge.
- The charge remains in place until all conditions of the contract with the purchaser are fulfilled, at which point it can be removed through a Release signed by the Chairman and Secretary of the Real Estate Board.
3. Cost and Documentation:
- There is no fee associated with registering the charge, and a sample of the charge documentation can be found in the Real Estate (Dealers and Developers) Act.
- When registering the charge, you must provide a copy to the bank holding the Trust Account where the deposits are maintained. Additionally, a Certificate from a Quantity Surveyor certifying the value of completed work is required before funds can be withdrawn.
4. Compliance and Protection:
- By registering the charge, you demonstrate compliance with regulatory standards and provide assurance to buyers and stakeholders regarding the proper handling of deposits.
- This process helps protect the interests of purchasers by ensuring that funds are utilized appropriately and that developers fulfill their contractual obligations.
In summary, registering a charge is a critical step in the financial management of a townhouse scheme, ensuring transparency, compliance, and protection for all parties involved. If you have further questions or require assistance with the registration process, feel free to reach out to Jamaica Homes for expert guidance and support.